Often, when a new businessman enters the market, he often forgets or totally ignores the cost of support for his products and services.
Depending upon the type of business you operate, that could be a very costly mistake. Why?
Because if you don't understand fully the expenses of doing business in its entirety, there is a good chance you will have a good portion of your profits consumed by these "hidden costs."
Especially in online information sales, the tendency sometimes is to assume that you won't have to deal with very many customer issues.
Obviously, your product and marketing support will vary depending upon the type of business you operate.
In some product lines, the support will be minimal. If you sell digital information in the form of an ebook or a DVD, your ongoing support costs should be fairly insignificant if the product works (performs) as it should.
Most everyone can figure out how to use the ebook or load the DVD into the machine - without any special knowledge or instruction.
You may need to coach some customers on how to download digital files. But that should be fairly inexpensive and can be done at the time of the sale.
However, if you choose to sell a product like software, your support costs could severely impact your profit margin.
Software products are notorious for customer questions and problems because often the interface and even the very concept of use is confusing, especially with brand new technologies.
Many folks feel it's just as easy to get on the phone and call support for an answer as it is to figure out how to do something by studying the user's manual or documentation!
If 25% (as an example) of the customers that purchased your software also called for assistance, you could be spending a great deal of your time (or that of a support person) on the telephone coaching customers on the use of their purchase.
If fact, you could even end up losing money on individual sales if the buyer repeatedly requires your time to figure out how to make your product work properly.
If you sell an inexpensive product, say at a $29 price point, and a customer requires your assistance for 1/2 hour, you may have just eaten up all the profit there was on that one sale if your time is worth anything.
Now I'm not suggesting that you solve this dilemma by refusing to give customer support. That is a given (that you need to provide support) in today's online marketplace.
Customers expect to be given personal assistance if they need it with any product.
My point is that you need to make sure you include the cost of support in the expense column of every product and activity you sell.
If you consistently track such things, you will have a good idea what that cost is over time.
Don't forget that there may be a support cost for other business activities besides product costs. Customers will ask how to sign up for a service, how to pay for items (credit card or not), when you will be sending goods, how to send goods back, how to remove their name or information from your records, how to get a discount or special price, etc, etc, etc.
You can minimize support needs by having excellent FAQs and a clear navigation of your web site. You can also be very clear about your policies and procedures in advance.
But there will always be a need for some level of support. You just need to make sure you have a clear picture of what that need will be in your business.
